In a small bowl, combine ⅓ cup warm water and yeast. Let stand until bubbly, about 5 minutes.
In a medium bowl, whisk together flour, sugar, baking powder, and salt. Using a pastry blender or 2 forks, cut in shortening until mixture is crumbly. Stir in ¾ cup cheese, ½ cup bacon, buttermilk, and chives until a shaggy dough forms. Turn out dough onto a lightly floured surface, and knead until smooth and elastic, about 5 minutes.
Spray a large bowl with cooking spray. Place dough in bowl, turning to grease top. Cover with plastic wrap, and let stand in a warm, draft-free place (75°) until doubled in size, about 1 hour.
Spray a 10-inch cast-iron skillet with cooking spray.
On a lightly floured surface, roll dough to 1-inch thickness. Using a 2-inch round cutter, cut dough, rerolling scraps as necessary. Place biscuits in prepared skillet. Cover and let rise in a warm, draft-free place (75°) until doubled in size, about 45 minutes. Brush with egg.
Preheat oven to 400°.
Bake until golden brown, 15 to 17 minutes. Sprinkle with remaining ¼ cup cheese and remaining ¼ cup bacon. Garnish with chives, if desired.
Recipe by Paula Deen Magazine at https://pauladeenmagazine.com/bacon-cheddar-angel-biscuits/